The more I research the topic the more I think I would need to splurge on a modern lens first.

I wish there was a Sony E mount equivalent of Sigma 17-50/2.8 OS (but compact). The difference when shooting the same subject at same settings with Sony kit and T3i with Sigma is noticeable, and I think it's lens more than camera.

Right now it appears the lens that could make most difference is SEL50F1.8. Doesn't look like there's a zoom available yet that would combine the IQ of Sigma with compact factor at reasonable price.

I wish Sony had a 35 1/8 or similar, 50 mm is a bit tight.

There is a SEL35F18... if you insist on a 35mm.

For me, there is a pleasure shooting with legacy lenses that simply cannot be matched by the Sony AF lenses, even when manual focusing. As for the IQ than you can obtain with legacy lenses, many of us are very happy with it.